Despite increasing geopolitical tensions, rising nationalism and Covid fears, imports of consumer goods grew 8.2% in China last year. Sales of domestic goods contracted 3.9%. Chinese consumers’ historic pursuit for beauty helped see imported cosmetics as one of the biggest drivers of this growth, with their value rising over 30% according to China’s Ministry of Commerce (MOFCOM) figures published last week.
The strong growth in cosmetics imports further reinforces the attractiveness of foreign skincare brands, and is well timed to coincide with the launch of our China Skinny Skincare Tracker this week. The Tracker is an interactive dashboard providing up-to-date, actionable intelligence for China skincare categories, overlaying ecommerce data with a quarterly consumer survey. It is like an online Disneyland for China cosmetics aficionados, providing granular insights to assist with game-changing decisions that will allow you to spot trends and keep up in the dynamic category.
Diving a little deeper, it is unsurprising that demand for imported beauty products has soared over the past 12-months. With a typical basket of cosmetics costing as much as 60% more in China than in other countries, Chinese beauty buyers have historically bought a sizeable share of their skincare and makeup when they or friends are travelling abroad, or through daigou agents. Much like in the luxury industry, consumers’ inability to travel or source reliable daigou services, has seen many repatriate their purchases of foreign cosmetics to China.
In short, the stunning 30% rise of imported cosmetics hides the reality that savvy domestic brands are increasingly eroding foreign brands’ market share. Western, Japanese and Korean beauty brands still hold an aspirational mantle among most Chinese consumers. Given many domestic brands go as far as dialling up ‘French’ and other foreign characteristics, it’s fair to say that ‘C-Beauty’ (China Beauty) still has some way to go before they truly command an authentic preference. Nevertheless, insights from our Skincare Tracker have identified how domestic brands’ growth is largely due to marketing strategies that are more in-line with Chinese consumers’ wants and needs.
One of the interesting insights from the Skincare Tracker was how much foreign cosmetics brands dominated sales on Singles’ Day, but account for just a third of top selling brands on Tmall during the rest of the year. Kudos to the alluring campaigns and promotions during the shopping festival, but for categories such as cosmetics where habits are formed through regular rituals, foreign brands should be doing more to ensure their products are purchased year-round.
Another concern for foreign brands is how much less personal their claims and positioning are relative to their domestic competitors. Similarly, foreign skincare products are less tailored to specific target markets. We’ve elaborated these findings and included some other interesting insights such as surprising perceptions about sustainability and cruelty-free cosmetics here. Many of the findings are also relevant for brands beyond the beauty category.
In addition, we’ve published a white paper which unfolds case studies showing how beauty brands are best adapting their marketing to consumer needs identified using the Skincare Tracker’s insights. You can download it here.
For more information about the China Skinny Skincare Tracker and our other tools such as the Dairy Tracker, click/tap here. Or contact me and I can share more. Here’s to smarter strategies from more foreign beauty brands!